Integrated billing mechanisms in the Internet of Things to support information sharing and enable new business opportunities

The Internet of Things (IOT) concept and enabling technologies such as RFID offer the prospect of linking the real world of physical objects with the virtual world of information technology to improve visibility and traceability information within supply chains and across the entire lifecycles of products, as well as enabling more intuitive interactions and greater automation possibilities. There is a huge potential for savings through process optimization and profit generation within the IOT, but the sharing of financial benefits across companies remains an unsolved issue. Existing approaches towards sharing of costs and benefits have failed to scale so far. The integration of payment solutions into the IOT architecture could solve this problem. We have reviewed different possible levels of integration. Multiple payment solutions have been researched. Finally we have developed a model that meets the requirements of the IOT in relation to openness and scalability. It supports both hardware-centric and software-centric approaches to integration of payment solutions with the IOT. Different requirements concerning payment solutions within the IOT have been defined and considered in the proposed model. Possible solution providers include telcos, e-payment service providers and new players such as banks and standardization bodies. The proposed model of integrating the Internet of Things with payment solutions will lower the barrier to invoicing for the more granular visibility information generated using the IOT. Thus, it has the potential to enable recovery of the necessary investments in IOT infrastructure and accelerate adoption of the IOT, especially for projects that are only viable when multiple benefits throughout the supply chain need to be accumulated in order to achieve a Return on Investment (ROI). In a long-term perspective, it may enable IT-departments to become profit centres instead of cost centres. © 2010 - IOS Press and the authors. All rights reserved.

The design of an agent for modelling supply chain network dynamics

A useful insight into managerial decision making can be found from simulation of business systems, but existing work on simulation of supply chain behaviour has largely considered non-competitive chains. Where competitive agents have been examined, they have generally had a simple structure and been used for fundamental examination of stability and equilibria rather than providing practical guidance to managers. In this paper, a new agent for the study of competitive supply chain network dynamics is proposed. The novel features of the agent include the ability to select between competing vendors, distribute orders preferentially among many customers, manage production and inventory, and determine price based on competitive behaviour. The structure of the agent is related to existing business models and sufficient details are provided to allow implementation. The agent is tested to demonstrate that it recreates the main results of the existing modelling and management literature on supply chain dynamics. A brief exploration of competitive dynamics is given to confirm that the proposed agent can respond to competition. The results demonstrate that overall profitability for a supply chain network is maximised when businesses operate collectively. It is possible for an individual business to achieve higher profits by adopting a more competitive stance, but the consequence of this is that the overall profitability of the network is reduced. The agent will be of use for a broad range of studies on the long-run effect of management decisions on their network of suppliers and customers.